Salary Surveys 101

What is a salary survey, how is it used, and why should I care? We’re here to help remove the mystery.

What is a Salary Survey?
A salary survey is an analytically derived compilation of data from participating companies that describes their employees’ compensation at a specific point in time. Salary survey companies take data reported to them, apply statistical quality control and proprietary methods and then resell the reformatted information to compensation professionals.

How is it used?
Compensation professionals operating either within a company as employees of the HR department or as external consultants use this information to determine the fair market compensation based on the company’s size, location, and industry and other factors as determined by the companies’ pay philosophy employee’s job duties.

Why should I care?
If you’re an employee, your employer might be using salary survey data to determine how to pay you fairly, or they might not be, and they’re guessing. If they are, it’s good to know where they get most of their pay information.

If you’re an employer, you must recognize the need to accurately and appropriately reward your employees. If you pay too much, you are wasting money that could be invested elsewhere in the company. If you aren’t paying enough, your employees will be unhappy, productivity will decline, and some will eventually quit. When you try to hire new employees, you will need to know what the market is. Pay too much, and you will have internal equity problems, which is the route to getting sued. Pay too little, and the candidate will say no. Think of a salary survey as competitive intelligence information you can purchase, or can you?

Where can I get one?
Salary surveys, aka compensation survey companies, will usually allow you to purchase their surveys one of two ways. As a survey participant (you gave them your company’s compensation data), they will sell to you for a lower fee. The higher cost is reserved for non-participants (those who didn’t share their compensation data) and pay considerably more. There is a trend to only sell to participants and neither non-participants nor consultants.


Government Surveys

  • Bureau of Labor Statistics

Subscription Surveys

  • Typically published by third-party commercial survey publisher or membership association

Custom Surveys

  • Often conducted on behalf of sponsoring company or organization

Online Self-Reported Surveys

  • A.K.A. Crowd-sourced

Key considerations:

  1. Coverage of comparable organizations
  2. Comparable jobs & sample size
  3. Timing of publication
  4. Direct (and indirect) cost of acquisition
  5. Measurement of relevant components
  6. Reliability ( Data validation / GIGO)

Commonly Reported Data:

  1. Base Pay – Every survey has this
  2. Total Cash – Base + Variable
  3. Total Direct – Base + Variable + LTI

Common Data Sets:

  1. All Participants
  2. Geography
  3. Industry
  4. FTE
  5. Revenue

Beware – interpretation of the market data can be somewhat complicated:

Measures of Central Tendency

Mean – a simple average across all companies and employees

Weighted Mean – the average of the company averages weighted by the number of incumbents

Measures of Dispersion

Median – also known as the 50th percentile describes the midpoint of a range of numbers sorted from high to low

Foote Partners
Pearl Meyer

Salary surveys are an important tool in an equitable, efficient, and effective pay strategy. They are based used in a coordinated compensation strategy aligned with the company’s values as well as tactical and strategic objectives. In this increasingly competitive world, you need the best data available and the team to turn it into actionable policies that make an impact on your team, market, and mission.